Bipartisan Opposition to Proposed FY 2006 Farm Budget

The White House released its annual economic report to Congress this week. In it, the president pledged to keep pursuing free trade policies and tax reform as ways to boost the U.S. economy.

But the short-term economic news this week was more downbeat. *The index of leading indicators slipped in January, a sign of possible economic weakness in the months ahead. *Wholesale prices rose last month, as big increases for cars, cigarettes and alcohol raised new concerns about inflation. *And retail sales fell in January, posting their weakest showing in five months.

That's the big picture. For farm state interests, securing an economic future will rely more on political largesse. The president has proposed a fiscal 2006 farm budget calling for deep cuts in subsidy payments. But to date, the plan has sparked as much opposition as support.

This week, Secretary of Agriculture Mike Johanns faced bipartisan opposition to the proposed fiscal year 2006 farm budget. Both Republican and Democratic members of the House Appropriations committee voiced their concerns regarding President Bush's plan to cut farm payments.

Rep. Henry Bonilla, R-Texas: "Under the budget cuts, who will be the winners and who will be the losers?"

Johanns wouldn't classify anyone as winners or losers. He continued to defend the spending cuts indicating that under the budget proposal no area of agriculture would be left out.

Mike Johanns, Secretary of Agriculture: "What I see in this proposal is that it's a proposal that works across the entire farm community. It recognizes that all of us will have to be a part of the deficit reduction effort."

Analysts project the federal deficit will reach $427 billion this year. The administration seeks to reduce farm spending by $5.7 billion over the next decade. The budget calls for lowering the cap on federal subsidies by 30 percent, and cutting fixed payments to all farmers by 5 percent.

While there are discussions to cut payments to farmers, the Conservation Reserve Program will be expanded from 34.7 million to 37.2 million acres by next year. Taxpayer and environmental groups, as well as anti-poverty and rural advocates, are backing the bill. But, many of the country's farmers and agriculture organizations strongly oppose the cuts. They argue the administration should leave the 2002 farm bill alone.

Representative Jo Ann Emerson, a Republican from Missouri, said the subsidy cuts could reduce income in her district by as much as 23 percent.

USDA Chief Economist Keith Collins said the payment limitations would affect large farmers the most. He stated since cotton growers get the highest federal payments relative to the value of their crop, it wouldn't be unreasonable for them to contribute more.

Lawmakers from both sides worry the cuts will drastically reduce income for farmers both in the South and Midwest. According to a representative from the National Corn Growers Association, farm groups across the country are urging their members to mount a nation-wide grassroots lobbying effort against the plan.

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